Legislation requires us to state all significant forecasting assumptions and risks underlying the financial estimates³. A number of assumptions have been made when preparing this Long Term Council Community Plan (LTCCP), and those assumptions were agreed to by Council on 10 March 2004.

Those assumptions include:

Assumption	Probability of Occurrence	Financial Significance
• The principal assumption made for 2004/07 is that there will be no impact of inflation. The principal assumption made for the seven years subsequent to 2004/07 is that, unless otherwise known, costs and revenues will reflect the base years (2004/07), with no provision for any impact of inflation over those base years	Medium	Medium
• Interest rates will fluctuate over time. The Plan has been based on 2004 conditions	High	Medium
• The activities and levels of service provided by Council will not be subject to major change within the term of the document, with the exception of the provision of reticulated wastewater at Mangawhai, and also at three other communities, all situated on the Kaipara Harbour	High	High
• The District's population is projected to grow at 1.5 percent4 between census periods. Growth in the east of the District and around the Kaipara Harbour and in coastal areas is expected to continue to be relatively high compared to the rest of the District	Medium	Low
• There will be no major change in the present method of operating and funding the costs and operation of the roading network within the District during the period covered by the document, with the exception of the introduction of a target rate on forest owners to defray road maintenance costs caused by forest harvesting	High	High
• Council will continue to exist in its current form, activities and geographic area for the period covered by the document	High	High
• The continued development of the asset management plans will not disclose any major change in the levels of funding required to maintain the assets and infrastructure of Council	Medium	Medium
• Environmental standards for wastewater and stormwater discharges and community water supplies are expected to increase over time	High	High
• No major unforeseen natural event will affect the District or the infrastructure and other assets of the Council and its activities	High	High

The forecasting assumptions and sources of funds for the Mangawhai Wastewater Scheme (Mangawhai EcoCare) are detailed in the Policy on Development and Financial Contributions – Mangawhai EcoCare (page 24).

Statement of Prospective Financial Information

The financial information contained within this document is prospective financial information in terms of Financial Reporting Standard 29. The purpose for which it has been prepared is to enable the public to participate in the decision-making processes as to the services to be provided by the Kaipara District Council to the Kaipara community over the 2004/14 financial years. It is also intended to provide a broad accountability mechanism of the Council to the community. It must be noted that the information provided may not be appropriate for purposes other than as defined above.

In relation to the standard, the financial information presented in this Long Term Council Community Plan is considered to be a 'forecast'. A forecast is based on assumptions which Councillors and staff reasonably expect to occur.

The principal assumption made for 2004/07 is that there will be no impact of inflation. The principal assumption made for the seven years subsequent to 2004/07 is that, unless otherwise known, costs and revenues will reflect the base years (2004/07), with no provision for any impact of inflation over those base years.

No actual financial results have been used within these statements, as they have been prepared before the completion of prior financial period results. Where required for opening balance values, forecasts of the final values for the 2003/04 year have been utilised.

The actual results for the financial years 2004/07 are likely to vary from the information presented and may vary materially depending upon circumstances that arise during the three year period.

The following assumptions have been made in preparing this Plan:

• that interest rates on new loans raised during the year will be 7 percent

• that interest earned on cash funds invested will be 5.8 percent

Loans will be raised when needed throughout the period. Sensitivity to changes to interest rates on the borrowed funds will therefore depend both upon the interest rates actually achieved and the proportion of the period still to run when the loans are raised.

Significant Assets

• Key assumptions concerning useful asset life are detailed in page 33 of this volume.

• Source of funds for future replacement is explained on page 55 of this volume.

Borrowing Programme

The Local Government Act requires Council to include in the Long Term Council Community Plan its borrowing needs and borrowing programme, in detail for years 1, 2 and 3 of the Plan and in general terms for the following seven years.

Total borrowing programmed for the 2004/07 financial years, after netting off existing local government stock roll-overs is $22.843 million, including new wastewater systems at Mangawhai, Tinopai, Whakapirau and Pahi. The borrowings are for essential infrastructure expenditure requirements and will supplement, for existing infrastructure, the funding provided through the infrastructural depreciation component of separate rates and user charges.